The Biden Administration released a proposal to increase the number of chargers for electric vehicles that are eligible for tax credits across the nation.
The administration is trying to reduce carbon emissions by increasing incentives to encourage people to buy EVs instead of gas or diesel-powered vehicles. Many drivers are still hesitant to switch to electric vehicles due to the lack of public charging stations. There are currently only 192,000 public charging stations, even though there are over 3 million EVs. White House said that it wants to reach 500,000 EVs by 2030, but progress has been slow since early 2023.
The proposal issued on Wednesday by the Department of the Treasury (DOT) and the IRS clarifies that tax credits are available for individual charging ports, not only charging stations. This means that businesses can claim the credit multiple times if their charger can power several vehicles simultaneously.
The 2022 Democratic Inflation Reduction Act was the first to introduce tax credits. They save eligible businesses and individuals 30% on the cost of installing charging stations for their electric vehicles. Individuals can claim up to $1000, and businesses are eligible for a $100 credit.
The proposed increased credit eligibility has been hailed by multiple administration officials as a way of lowering transportation costs and encouraging more drivers to opt for EVs.
Ali Zaidi is President Joe Biden’s national climate advisor. He said: “Building America’s charging network will make transportation more affordable and the air around our road more breathable. It will also help to sustain U.S. emission trajectory while creating jobs that pay well in America.” The guidance released today will help accelerate investment in this vital infrastructure sector, and allow the U.S. economy to be at the forefront of the clean energy economy.
The administration released additional guidelines earlier this year on who was eligible for the credit based on the location of the charging ports. The eligible hubs must be in low-income areas, not urban. According to the administration, around two-thirds of Americans reside in these areas.
Republicans have tried to reverse the guidance. They claim that it is subsidizing rich areas such as Martha’s Vineyard or Beverly Hills and not poor neighborhoods.
Joe Manchin, now an independent senator and one of the principal architects of the Inflation Reduction Act, also criticized the guidance. The West Virginia senator claimed that the guidelines “spit in the face of rural America” when he said it in January.
Manchin stated, “This proposed guidance will ensure that rural Americans remain at the end of the investment line. This is the exact problem that this tax credit was meant to address. It chooses to give handouts to those who don’t need them while ignoring their responsibility to assist rural communities that are at risk of falling behind.”
